The article is updated on October 24, 2025.

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The financial world is waking up to a simple but powerful idea: stocks can be tokenized, and the implications are massive.

Imagine buying Apple stock from a self-custodial wallet, in $5 fractions, settled instantly, using stablecoins.

In June 2025, Robinhood made headlines with its launch of tokenized U.S. stocks in Europe via a partnership with Berlin-based fintech Bitpanda. This move enables European users to trade U.S. equities 24/7, fractionally, and without traditional brokerage frictions. At ETH CC in Paris, it was one of the most talked-about announcements. Robinhood wasn’t the first to explore tokenized equities, but it was the loudest. And the market listened.

Beyond Robinhood, Kraken, Coinbase, Gemini, Bybit and most recently Nasdaq are actively developing tokenized equity strategies - from synthetic derivatives to tokenized SPVs.

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As of June 2025, the market capitalization of tokenized stocks stands at ~$424 million -  a small slice of the tokenized RWA market. Though this nascent market is still navigating complex legal and regulatory considerations, today's $424 million tokenized stocks market is projected to potentially surpass $1 trillion as institutions seek faster, cheaper access to U.S. equities.

This momentum is also visible through our own partnerships with regulated digital asset platforms, fintechs, and asset managers, where we see growing demand for compliant, institutional-grade tokenized equities.

So the implementation phase has already begun. The question now is: How do we scale it in a compliant, efficient, and investor-ready way?

What Are Tokenized Stocks?

Tokenized stocks are digital representations of traditional equities, issued and recorded on blockchain infrastructure. Each token typically reflects an economic interest or ownership right linked to a real-world share of a listed company.

Depending on the structure, these tokens can represent:

• Direct ownership in the underlying stock (on-chain securities recorded under regulatory frameworks), or
• Indirect exposure, where tokens mirror the price performance of the equity through structures like SPVs or synthetic derivatives.

In essence, tokenization marries the legal frameworks with blockchain technology to modernize how securities are issued, held, and traded. Just like every wave of capital market evolution, from electronic trading to ETFs and now, tokenized securities, technology is again driving the shift.

But Are Tokenized Stocks “Real” Stocks?

The short answer: it depends on the tokenization models.

Depending on the tokenization approach, the tokens may grant direct equity ownership or function more like synthetic derivatives or wrapper tokens which mirror price movement.

• Synthetic or wrapper tokens (common) track prices (like CFDs), but don’t grant ownership.
• SPV-backed tokens offer indirect exposure, economic interest often with claims on dividends and distributions.
• Direct/Native tokenized securities are rare and  confer equity and voting rights, but face regulatory hurdles in most jurisdictions.

In practice, most investors aren’t chasing voting rights. They want exposure, liquidity, and accessibility - areas where tokenization adds tangible value.

Looking to issue tokenized stocks? Reach out to InvestaX and we’ll help you figure out the structure that fits your strategy.

Why It Matters: Real Infrastructure, Real Momentum

On paper, a tokenized public equity sounds fairly mundane: instead of holding your Apple shares in a traditional brokerage account, you hold them in token form on a blockchain wallet.

But underneath that simple shift is a structural rewrite of who gets to invest, how capital moves, and what a financial platform can offer its users:

• Settlement has the potential to move from T+2 to near instant
  
• Ownership becomes programmable
  
• Trading becomes 24/7 and borderless
  
• Minimums can drop to $5 instead of $500
  
• Access shifts from Wall Street to anywhere with internet connection

Benefits of Tokenized Stocks and Funds

Tokenization does not alter the economic or regulatory characteristics of the underlying asset, but it can improve how these assets are administered and accessed. Key potential benefits include:

• Fractionalization: The ability to structure shares or units in smaller denominations for more flexible allocation within permitted investor classes. For instance, Kraken claims to offer tokenized stocks with a minimum investment starting at just $1 USD. 
• Global onboarding (within regulatory limits): Digital identity and compliance workflows may support a broader eligible investor base on regulated platforms. Regulated platforms such as InvestaX use integrated KYC/AML workflows and supervised transfer controls to manage global investor participation while respecting jurisdictional rules.
• Extended Trading Windows: Some tokenized stock arrangements can operate on digital platforms that are not bound by traditional exchange hours. This allows transfers or trading sessions to occur outside standard market times, provided they remain within the platform’s licensing and compliance framework.
• Streamlined settlement environments: Tokenized equity exposures can move within controlled blockchain networks where transfers and record updates occur on a shared ledger. This can reduce some reconciliation steps between intermediaries involved in private market or wrapped-product structures.

These features provide institutions with additional ways to design distribution models while staying within established capital-market rules.

Nasdaq’s Move: Signal From a Veteran Player

Nasdaq’s recent filing with the SEC to allow tokenized versions of listed equities and exchange-traded products (ETPs) is a major development.  If approved, it would introduce dual-format trading - traditional equities and tokenized equivalents on the same order book, with identical execution priority and shareholder rights.

According to Katen’s evaluation, highlights from Nasdaq’s proposal include:

• Infrastructure layer: The proposal outlines how blockchain could be used as the settlement layer for tokenized equities and exchange-traded products.  ‍
• Regulatory alignment: The framework is designed to fit within existing U.S. securities laws, including the Securities Exchange Act, Regulation NMS, and established rules governing broker-dealers, clearing agencies, and transfer agents that have evolved over decades.

This move signals a structural approach to tokenized equities. The participation of established institutions like Nasdaq and DTCC suggests that tokenization is being developed as an extension of existing market infrastructure rather than a separate system.

What It Means For The Market Participants?

• For institutions and asset issuers, tokenization provides an alternative channel to reach new capital. Equity can be fractionalized, distributed in programmable formats, and embedded into new structured products.
• For digital asset platforms, it's obvious: if you already have 20 million verified users holding USDC, why shouldn’t they be able to buy Apple or any other stock the same way they buy Ethereum?
• For fintechs, tokenized stocks mean you don’t have to build an entire brokerage business just to offer fractional shares. A licensed asset tokenization platform like InvestaX can handle compliance, issuance, and secondary trading under regulated regimes.
• And for investors, especially in Asia, LATAM, and Africa, tokenized equities eliminate the friction of broker access, high minimums, FX inefficiencies, and outdated settlement rules.

What’s Next?

Tokenized equities remain in the early pilot phase, with market participants testing different models across jurisdictions. The next catalyst will likely come from regulatory harmonization, as jurisdictions work to either adapt existing securities laws or develop new frameworks that provide clearer guidance for tokenized securities. 

In the U.S., the GENIUS Act and STABLE Act are establishing clearer ground for reserve-backed and asset-linked digital products. In parallel, Europe (under MiFID II) and Asia (Singapore’s MAS, Hong Kong’s SFC) are enabling licensed entities to issue and distribute tokenized securities within established frameworks.

The U.S. SEC’s Commissioner Hester Peirce has noted that the agency remains open to multiple models of securities tokenization, signaling that the agency is willing to let the market test and evolve under existing securities laws. This flexibility is critical for innovation without undermining investor protection.

Meanwhile, institutions are beginning to operationalize pilot programs. Kraken is expanding its securities division in Europe, Coinbase is planning to launch tokenized stocks, and Gemini is exploring offshore RWA offerings. Collectively, these initiatives suggest that tokenized equities are moving from early testing toward practical, use-case validation.

Frequently Asked Questions

Through our discussions with market participants, we see several questions come up when evaluating tokenized stocks and tokenized funds. The clarifications below address the points that tend to matter most in practice.

1. Are tokenized equities legal?

Tokenized equities are generally treated as securities because they mirror characteristics of traditional shares. Their legality depends on how the product is structured, who holds the underlying asset, and whether the issuer operates within the licensing and regulatory framework of the relevant jurisdiction.

2. What do investors actually own when buying tokenized ETFs?

Tokenized ETFs generally give investors exposure to an ETF through a wrapper such as a feeder, SPV, or custodial structure. The ETF itself remains unchanged. Investors typically do not directly own the ETF units; instead, they hold a token that reflects the economic exposure defined by the wrapper. Transfers follow the platform’s licensing and jurisdictional rules.

3. Do investors own the underlying share directly?

Ownership depends on the structure. In many cases, investors hold an interest in a vehicle or custodian arrangement that holds the underlying shares, and rights are defined by the legal documentation, not the token itself. 

4. How does tokenization improve distribution?

Tokenization offers an additional channel to connect with eligible investors through digital onboarding, standardized reporting, and fractional ownership formats. Regulated platforms like InvestaX may also support global distribution where rules allow.

5. How liquid are tokenized stocks and funds?

Tokenization can provide a more coordinated environment for transfers, but it does not guarantee continuous or exchange-style liquidity for tokenized stocks. Liquidity varies depending on the structure, investor base, regulatory framework, and of course, the underlying stock. Some tokenized products are intended to be held for longer periods, while others may offer redemption windows or access to regulated secondary venues.

6. What jurisdictions allow tokenized stock offerings?

Regulated markets such as the EU, Switzerland, Singapore, and Hong Kong are actively developing frameworks for digital securities or tokenized assets. Availability depends on licensing, custody rules, and the issuer’s compliance approach. Access for investors is still subject to jurisdiction-specific restrictions.

Tokenize Stocks with InvestaX

InvestaX provides advisory services and regulated infrastructure to help financial firms to design, issue, and scale tokenized stock offerings

Contact us to learn how we can support your offering.